Refer to the information provided in Figure 23.11 below to answer the question(s) that follow. Figure 23.11
-Refer to Figure 23.11. A $10 million decrease in autonomous consumption
A) changes equilibrium expenditure to $160 million.
B) changes equilibrium output to $120 million.
C) increases the MPC.
D) increases the MPS.

Question

Refer to the information provided in Figure 23.11 below to answer the question(s) that follow.  Figure 23.11
-Refer to Figure 23.11. A $10 million decrease in autonomous consumption
A) changes equilibrium expenditure to $160 million. 
B) changes equilibrium output to $120 million. 
C) increases the MPC. 
D) increases the MPS.

Quizplus · Accepted Answer

A $10 million decrease in autonomous consumption reduces equilibrium expenditure by the same amount, assuming the marginal propensity to consume (MPC) and other factors remain constant.

Refer to the Information Provided in Figure 23